Santa Cruz's Next Economic Opportunity May Already Live Here

Written By Doug Erickson

Santa Cruz County's greatest economic asset isn't something we need to attract. It's already here: a workforce more educated than California's. The opportunity now is building local jobs worthy of it.

Most regions spend their economic development budgets trying to attract talent. They offer relocation incentives, promote their quality of life, and court remote workers. Santa Cruz County has a different problem. The talent is already here. Too often it has nowhere local to go to work.

That finding sits inside the 2026 Santa Cruz County State of the Workforce report, prepared by BW Research Partnership for Workforce Santa Cruz County and presented to the county's Business Council in September. Read one way, the report is a warning. Read another way, it describes an opportunity few communities have.

A Talent Surplus Hiding in Plain Sight

Source: 2026 Santa Cruz County State of the Workforce, BW Research Partnership for Workforce Santa Cruz County.

About 47% of county residents hold a bachelor's degree or higher, compared with roughly 40% statewide. That is a real competitive edge, and it is the kind regions spend decades trying to build.

The report also tracks the "residential workforce gap." That is the difference between how many residents work in a given occupation and how many of those jobs actually exist in the county. For management, business, science, and arts occupations, which are the higher-paying professional roles, the gap grew from 4,795 in 2023 to 8,330 in 2025. Between 2024 and 2025 alone it widened by 944. The report reads this as residents increasingly finding work outside the county.

Behind those numbers are thousands of engineers, scientists, managers, designers, and analysts who live here. They drive over Highway 17, log in to employers in San Francisco, or board planes on Monday mornings. They sleep in Santa Cruz County, but their paychecks, ideas, and professional networks feed economies somewhere else.

Why It Matters Now

Source: 2026 Santa Cruz County State of the Workforce, BW Research Partnership for Workforce Santa Cruz County.

The rest of the report explains why this gap deserves attention.

  • Wages lag costs. The 2025 median wage was $68,000, roughly half the countywide living wage. The median home price was $1.3 million.

  • The workforce is aging. The prime working-age population is shrinking, and residents 65 and older are the only growing age group.

  • Participation is low. Labor force participation sits at 62.8%, below the state average.

  • Growth is narrow. Information and communications technology grew 18.5% from 2022 to 2025, and healthcare grew 15.7%. Meanwhile, 12 of the county's 17 industry clusters lost jobs.

Taken together, this is not a shortage of talent. It is a shortage of opportunity, and that is the more solvable of the two problems.

Source: 2026 Santa Cruz County State of the Workforce, BW Research Partnership for Workforce Santa Cruz County.

The Glass Is Half Full

The skilled workforce is the hardest part of an innovation economy to build. A region can't buy it with tax incentives or recruit it overnight. Santa Cruz County already has it.

Each of those 8,330 residents is a potential hire for a local company. Each is also a potential mentor, angel investor, board member, or founder. Their expertise is already in the county, and much of it is simply being applied elsewhere.

"We already have a highly skilled workforce living in Santa Cruz County," said Andy Stone, Director of the Workforce Development Board for the County of Santa Cruz. "The opportunity is to create more high-quality jobs here so more of that talent, experience, and economic activity can stay in our community."

The report his board commissioned points in the same direction. Its strategic priorities include expanding apprenticeship and internship programs, and supporting business growth and entrepreneurship by convening employers and workforce partners.

Why One Good Job Creates Five More

“When we approved the employment incentive agreement with Joby, the goal was simple: make sure the next great Santa Cruz company grows here instead of leaving. Every high-quality job we keep local supports our restaurants, our shops, and our families.”
— Bonnie Lipscomb / Deputy City Manager City of Santa Cruz

Keeping high-value jobs local matters well beyond tech, and economics explains why.

UC Berkeley economist Enrico Moretti studied the "multiplier effect" of innovation jobs. His research, drawing on 11 million American workers across 320 metropolitan areas, found that each new high-tech job in a region creates five additional local jobs outside high tech over the long run. Two of those five tend to be professional roles such as doctors and lawyers, and three go to workers in nonprofessional occupations such as restaurant and retail staff.

That figure is a national average, not a Santa Cruz-specific estimate. Still, the logic holds. When skilled workers earn their paychecks locally, they spend them locally on restaurants, healthcare, childcare, construction, and professional services. Brookings has a short, readable summary of Moretti's findings.

For a county where the median wage trails the cost of living, that multiplier is not abstract. It is how innovation jobs turn into opportunity for everyone else.

Proof of Concept: Joby Takes Flight in Santa Cruz

The City of Santa Cruz has already shown what keeping high-value jobs local can look like. In February 2024, the City Council voted 6 to 1 to approve an Employment Incentive Loan Agreement with Joby Aviation. The agreement offers a forgivable loan of up to $500,000, earned at $2,000 for each new full-time job, which makes room for as many as 250 new positions. The funds help Joby buy equipment as it grows its employment center here.

That matters in a community that watched homegrown giants such as Netflix, Seagate, and Plantronics start here and then move away. Joby is building all-electric aircraft, and it is choosing to build that workforce in Santa Cruz. The workforce report credits aviation with growth in the county's aerospace and transportation manufacturing cluster, even as other parts of that cluster shed jobs, and it points to the DART-AMAP model as one to build on. If Moretti's estimate holds even roughly here, the benefits of those jobs will reach far beyond Joby.

What Santa Cruz Works Is Already Doing

Santa Cruz Works has spent 18 years building ways to connect local talent with companies being built here. Five of them map directly onto the report's findings.

  • New Tech Meetup. Every month, innovative local startups meet the community at Santa Cruz Works' New Tech Meetup. Attendees discover new productivity tools, startups find customers and employees, and job seekers find their next role. Many people leave inspired to start companies of their own.

  • Launchpad. Each year, Santa Cruz Works, UC Santa Cruz, Cabrillo College, and the City of Santa Cruz host Launchpad, which pairs a startup competition with a job fair. In one room, local founders pitch the companies they're building while local job seekers meet the employers who are hiring. It puts the talent and the jobs in the same place on the same day.

  • Seed capital with Santa Cruz Ventures. A startup becomes a payroll once it has capital. Santa Cruz Ventures, a $10 million fund focused on sustainability and planetary health startups in Santa Cruz and along the Central Coast, invests in companies rooted in our region. Through the fund's structure, 10% of fund returns are donated to Santa Cruz Works, so successful local companies help support the next ones.

  • Builder Night. Every week at Pleasure Pizza in downtown Santa Cruz, people who make things show what they've built in five minutes, with no slides and no sales pitches. It is a low-stakes room where future cofounders, first hires, and collaborators meet.

  • Paid internships. Our new paid internship cohort, a partnership among Santa Cruz Works, Cabrillo College, and the City of Santa Cruz, places local talent with local employers. It builds the earn-and-learn pathways the report recommends and gives companies a low-risk way to grow their teams.

Each program is a different way in, and they share one purpose: helping people who live here do their best work here.

An Invitation

If you are one of the thousands of skilled residents working outside the county, we'd like to meet you. Come to New Tech or Builder Night. Come to Launchpad to meet the companies hiring here. Consider investing in a local startup, or start one yourself.

If you lead a local company, host an intern, hire locally, and tell us what is holding your growth back.

Santa Cruz County doesn't need to import its next economy. Much of it is already here, living in our neighborhoods and commuting over the hill. Our job is to give that talent more reasons to stay.

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